Mill Creek is Mono Lake's third largest tributary. Yet the valuable habitat it provides for birds, fish, and wildlife has been substantially impaired by the excessive diversion of its water. For many years the Mono Lake Committee has sought to understand why over 75% of Mill Creek's flow is being diverted when water rights allow for far less.

One reason for this excessive water diversion problem has been the simple physical limitations of old infrastructure. Southern California Edison is now preparing to rehabilitate the system that distributes water after it goes through their Lundy hydropower plant (along with many other improvements required in their hydropower license). Fixing this old infrastructure is a win-win: water rights holders will get their full allocations into the Wilson system through a modern facility, and Mill Creek will prosper by retaining the rest of its flow.

A Settlement Agreement andExplanatory Statement were submitted in 2005 to the Federal Energy Regulatory Commission (FERC) that addresses the FERC relicensing issues of the Lundy Hydropower Project. The settlement includes a minimum release from Lundy Reservoir, the construction of a conveyance facility that can carry excess unused water from the powerhouse back to Mill Creek, and the implementation of an annual water management planning process.